Banks asked to provide bill discounting facility to MSMEs against payments due from large corporates: FM

Banks asked to provide bill discounting facility to MSMEs against payments due from large corporates: FM

New Delhi, Oct 15 (KNN) Finance Minister Nirmala Sitharaman has said that to ensure liquidity for small businesses, banks have been asked to provide bill discounting facility to the MSME sector against payments due from the large corporates.

She said while briefing reporters after meeting heads of state-run banks for measures to boost the economy.

Bill discounting is an arrangement under which a seller recovers an amount of sales bill from financial intermediaries before it is due.

Such intermediaries charge a fee for the service.

Sitharaman said that the CPSEs have been ased to make payments to MSMEs ahead of Diwali.

Monday's review meeting with CEOs of public sector banks was to discuss various issues, including progress on credit offtake, as part of efforts to prop up the economy.

The meeting review fund flow to stressed non-banking finance companies (NBFCs) and MSMEs. The banks also presented their report card on partial credit guarantee scheme and fund raising from the market to enhance their capital base.

Meanwhile, Finance Secretary Rajiv Kumar said the public sector banks disbursed Rs 81,781 crore in the nine days of 'loan mela' from October 1 to 9.

He said that an amount of Rs 34,342 crore was disbursed to new entrepreneurs, adding that the lenders followed prudential norms while disbursing the loans.